VW wins court backing in battle with parts suppliers

Volkswagen on Friday won a key legal battle in a damaging dispute with two suppliers after a court ordered the components groups to deliver missing parts to the German carmaker.

Europe's biggest carmaker has already fulfilled the necessary conditions for the delivery of the missing component parts, the regional Court of in the western German city of Braunschweig said.

The court went on to say that the suppliers were in breach of their contracts with Volkswagen, warning that they could face fines of up to 250,000 euros (283,000 dollars).

The dispute between VW and the two suppliers – gearbox specialist ES Automobilguss and seat covers manufacturer Car Trim – has already forced the carmaker to halt production of its flagship VW brands and to consider cutting the working hours of about 20,000 employees.

It is not clear what is behind the dispute between VW and the suppliers, which is to be the subject of a further court hearing on August 31.

The row has added to the pressure on VW as it battles to emerge from the emissions-testing scandal that has engulfed the group after it admitted last September to installing software aimed at cheating tests on 11 million diesel vehicles around the world.

VW plans to halt the production of VW’s Golf and Passant brands at its Wolfsburg and Emden assembly plants in Germany and has raised concerns among the carmaker's network of dealers.

"We have now received the first call from customers concerned that their vehicles might not be delivered on time," VW dealer Ernst-Robert Nouvertne told dpa.

VW warned on Thursday that if the issue remained unresolved it might have to temporarily cut the working hours of about 20,000 workers at four plants, including its main factory in the northern German city of Wolfsburg.

Last update: Fri, 19/08/2016 - 15:30
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